Analysis of the Business Operations of BMW - Assignment Example

ANALYSIS OF THE BUSINESS OPERATIONS OF BMW Executive Summary The company considered in this report is BMW Company. BMW is a world leading automobile producing company, which has its headquarters in Munich, Germany. BMW is a multinational company well known for its unique vehicle brands. The company has business operations in 150 countries today. The company has subsidiaries with which it conducts some other businesses, like financing automobiles. The report focuses mostly on BMW’s automotive segment of operations. It entails an assessment of BMW’s automotive business operations, achievements and an analysis of the major challenges faced by the company. The analysis has its basis on data from some of BMW’s websites, news reports, and the company’s financial reports for the past five years. The analysis made, aims at finding out how BMW manages its operations to be able to produce and deliver in time, cars that are according to the customers’ preferred designs. BMW does not carry out mass production like all the other automakers such as Toyota run productions. The paper also seeks to ascertain other serious challenges the company is facing in its daily operations and the suitable solutions for them. Business operations As noted in the executive summary, the report dwells on BMW’s automotive segment of operations. BMW cars normally have a product existence of about seven good years. To improve growth, BMW acquired some established mergers like Mini Cooper and Rolls Royce (Gilpin, D. 2014, p.11). The company focuses on a strategy of remaining relevant and profitable despite the operational setbacks. BMW is utilizing the internet well in connecting with its associates and clients through online media and other digital interfaces. BMW enthusiasts can order their preferred car models through online mediums like ‘MyBMW’ (BMW Company 2015, p.1). Here customers can submit their preferred car designs. The customers are allowed to check car brand features and administer queries to the company about the performance of certain cars they are interested in. Through online links like mybmw.co.uk/z4v3r4a5, clients can submit their best designs and make customized orders. First a customer is to register as a user to own an online profile on this link. The company then allows them to search for their preferred BMW centers or even store a maximum of three BMW centers in their ‘MyBMW’ profile. For clients wishing to buy finished brands, they’re able to download a brochure of the available cars and their price list before making an order. Those wanting their designs can submit a requisition having their preferred designs, with the detailed specifications. Through requesting a test drive, they can select their vehicles of choice (among the available brands), and include the specific additional features/ details they need in their preferred configuration. This information will be received at the customer’s preferred BMW center before any manufacturing / remodeling starts. Usually, the company allows customers to submit their preferred configurations on the five key areas of; the exterior color, wheels, engine, interior trim as well as the upholstery. After clients have submitted their preferred car models to their preferred ‘MyBW’ center, the company takes the necessary to manufacture and deliver the clients customized orders in promptly (BMW Company 2015, p.3). Promptness, in this case, is about delivering the specified brand to the customers in the desired quality, number, and place at the preferred time. To implement this successfully, BMW has developed effective customer experience architecture. It entails the company’s brand platform, which describes the exact ideas representing the make. In its operations to manufacture and deliver the orders, the company considers the customers’ feelings and perceptions about the brand over their interactions with the company. Segmentation is a step BMW utilizes so much in this process. Here, the manufacturing/ assembling process is divided into discrete units, to include all the requirements of the customers in every step. Different customers will automatically have different needs, so each profile segment is dealt with appropriately. Different segments are handled as per their inventory needs and major drivers of buying choices as well as product views. After that, there is prioritization (BMW Company 2015). The company evaluates the customers’ segments against the business segments and provides brands with high quality at the desired time while giving priority to the customers’ needs. Park & Delmar (2011) also observe that the company is conducting strategic online advertising like marketing channels internet 468*60 banners. Other means are; e-catalogue, brochures, test drive registration for mail alert message and email marketing. The target audience is at least 26.5% of the individuals aged between 25 and 34 years. These campaigns are for availing more information to potential clients about BMW’s premier offers and products. The program has enabled many clients to submit their preferred product designs and specifications for custom engineering fabrications. Inviting clients to avail groundbreaking designs and custom making to their specifications and tastes is a unique operation strategy that enables BMW stand out in its auto manufacturing operations. The customer designed manufacturing of custom cars are not in mass production like in other car making companies where the automakers design and manufacture for the market. This strategy enables BMW Corporation continue focusing on provision of unique top brands and customer loyalty. The success of this strategy is attributable to the company’s consistent focus on the strategic factors below; Costs; Minimizing costs to maximize profits Quality; Consistent conformance to customers’ specifications and expectations Speed; Promptness in delivery of the customers’ requests Flexibility; Operating with convenience and ensuring there is ease of executing customer-preferred changes. Dependability; Delivering products or services when they were promised to customers Agility; Flexibility and Speed Combined Challenges Facing the Operations of the Company Despite all the achievements, BMW’s operations are still facing a number of setbacks and difficulties. In fact, even after restructuring and putting up a range of brand new competitive products and services in the market, BMW still grapples major challenges. The two major challenges that BMW faces are; BMW faces the challenge of coping with stiff competition from competitors in the European automotive market. There is a slow growth in the automotive sector, which has led to stiff competition among major automotive makers. BMW is therefore compelled to acquire merger partners in order to promote its brand. Some of its newest cars like BMW 640i SE Coupe’ and BMW X6 M have designs of efficient features to counter competition (BMW Company 2015, p.10). The objective is to try to outdo the stiff rivalry from mega car dealers like Volkswagen and Fiesta. The cost of countering the competition is quite much and is still a challenge for the company. Another major challenge facing BMW is on the issue of environmental concern. Despite making tremendous improvements in its newest cars and automotive products, BMW faces stringent regulations to conform to the newest environmental laws. They face the challenge of meeting the new emission standards set by many countries, which are stricter and difficult to adhere to full compliance. The implication of such strict regulations is increased costs of producing improved of engine versions, to make them friendlier to the environment. The company’s profitability margins in effect suffer. Recommendations for the Identified Challenges Some of the discussions of the proposed improvements to address the challenges identified in the analysis above, follow. The recommendations are in the lines of the two major challenges BMW faces lately as discussed in the previous section. To counter the stiff competition, the marketing team emphasis should be on more retail sales than rental car fleets. They marketing team should consider cutting back on the discounts offered in highly competitive markets like Europe to maximize profits in such areas. The quality control team should cooperate with the company’s mechanical engineering team to evaluate in detail the quality of parts delivered by the suppliers of the company. Recently BMW launched new models (X5, Z4, and X), which have improved features. These features are more luxurious and sporty (BMW Group 2015, p.2). BMW has also acquired the Mini Cooper and Rolls Royce car producers, and their classy models have promoted the company’s competitive advantage. To overcome their environmental challenges, BMW, and other motor companies have attempted to utilize improved technologies to lower pollution. The brand new BMW 7-Series and the Z4 are already designed to fulfill the environmental standards. BMW is considering the development of electric cars and other eco friendly models. BMW has recently introduced the ‘Evolve’ mobile app, which has an online dashboard that gauges compatibility for electric vehicle prospects (HighBeam Research 2011, p.3). The new BMW M6 models BMW’s official Company Logo. BMW 640i SE Coupe’. BMW X6 M. BMW Headquarters (Bayerische Motoren Werke) in Munich, Germany. Bibliography BMW 2015, MyBMW M, BMW Automobiles, retrieved 16 February 2015, . BMW Group 2015, Company, BMW Group at a Glance, News, retrieved 14 February 2015, HighBeam Research 2011, ‘BMW Launches EVolve Mobile App and Online Dashboard, Gauging Compatibility for Electric’ Vehicle Prospects. (2011)  Ecology, Environment & Conservation. NewsRX. 6 May, p.3, retrieved 18 February 2015, Clifton Park, N.Y.: Delmar, 2011, ‘Audi, BMW, Mercedes-Benz, MINI, Saab Volkswagen, Volvo’ .Chilton European service manual: (2010 ed.). Gilpin, D. 2014. ‘BMW. Mankato’, Minn.: Sea-to-Sea Publications pp. 11 -16. Read More